[Congressional Record Volume 149, Number 96 (Thursday, June 26, 2003)]
[Senate]
[Pages S8718-S8719]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           ARTHUR LEVITT, JR.

 Mr. SARBANES. Mr. President, earlier this month the Franklin 
D. Roosevelt Distinguished Public Service Award was presented to Arthur 
Levitt, Jr., the widely respected former chairman of the Securities and 
Exchange Commission. The award is made annually by the Franklin D. and 
Eleanor Roosevelt Institute, on whose board I am privileged to serve.
  The speaker at the presentation was Conrad Black, now Lord Black, 
chairman of the Telegraph Group, Limited. Lord Black is active in 
numerous nonprofit boards, foundations and councils.

[[Page S8719]]

  In his remarks Lord Black spoke vividly and in detail about 
Depression-era America, and the ``bold experimentation,'' as he put it, 
of the New Deal years.
  I ask unanimous consent that the text of Lord Black's remarks be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

Address of Lord Black at Franklin Delano Roosevelt Distinguished Public 
                          Service Award Dinner

       On election night, 1932, unemployment stood at 
     approximately 30%. There was minimal direct government relief 
     for the 14 million or so unemployed. Their condition was 
     alleviated by private sector charity, and by theft and 
     begging.
       The Soviet Union advertised in the United States for 6,000 
     skilled workers to go to Russia in 1932 for a period of 
     several years; it's New York office was swamped with 100,000 
     applications. The natives of West Africa sent New York City 
     $3.77 to help with relief for the poor. When the city of 
     Birmingham, Alabama, advertised for 750 ditch-diggers to work 
     ten-hour days for $2 per day, 12,000 applications arrived in 
     two days.
       In the coal-mining regions of Kentucky and West Virginia, 
     over 90% of children were suffering from malnutrition. The 
     country had suffered a general deflation of more than 20%. 
     Millions of Americans faced the distinct possibility of death 
     by starvation or exposure to the elements. Large numbers of 
     people lived from the scraps and leftovers thrown out in the 
     garbage by restaurants and hotels.
       The volume of cheque transactions and of stock market 
     transactions in the United States had declined by 60% since 
     1929. The amount of new capital financing had declined by 
     over 95% since 1929. The volume of new building contracts had 
     declined by 75%. By inauguration day in March 1933, the Dow-
     Jones Industrial Average was down by 90% from its high in 
     September, 1929.


                             bank failures

       There had been 5,000 bank failures in three years, wiping 
     out nine million individual bank accounts. Steel production 
     was under 20% of capacity, and United States Steel 
     Corporation, which had had 225,000 full-time employees in 
     1929, now had no full-time employees, apart from those in the 
     executive offices.
       Total non-agricultural production was less than half of its 
     1929 level. Manufacturing income has shrunk by 65%. 
     Agricultural production, while approximately equal in 
     physical volume to that of 1929, had shrunk in farm income 
     from $12 billion to slightly over $5 billion.
       About 45% of the residential homes in America had been or 
     were in danger of being foreclosed by mortgage-holders. 
     Through the first six months of 1933, 250,000 homes were 
     foreclosed, well over a thousand per day, the families 
     pitched out into the streets. The money supply, deflation-
     adjusted, had declined by 25% in four years.
       Many local and state governments, including Chicago and 
     Georgia, could not pay their schoolteachers. Georgia closed 
     over a thousand schools attended by 170,000 students. Most 
     rural Alabama white schools were closed through the early 
     months of 1933.
       On the day before inauguration day, 32 states had closed 
     all their banks indefinitely. Six other states had closed 
     almost all their banks. In the other ten states and in the 
     District of Columbia, withdrawals were limited to 5% of 
     deposits and in Texas to $10 per day. The U.S. financial 
     system had reached the last extremity before it would 
     collapse completely, taking the life's savings of tens of 
     millions of people and what was left of the international 
     economic system with it.
       American literature achieved a virtual golden age with 
     writers such as John Steinbeck, Erskine Caldwell, Edmund 
     Wilson, and John Dos Passos describing depression conditions.


            Franklin D. Roosevelt's First Inaugural Address

       Over 400,000 people came out to hear Franklin D. 
     Roosevelt's famous first inaugural address; they covered 40 
     acres of lawns adjacent to the Capitol. For the first time 
     since the Civil War, soldiers in full combat gear and machine 
     gun emplacements surrounded by sand-bags were visibly 
     guarding the main public buildings of Washington.
       Roosevelt promised bold experimentation. In the Hundred 
     Days of the spring of 1933, the Roosevelt administration 
     reorganized and reopened the banks and guaranteed their 
     deposits, a great monetary step as bank deposits now joined 
     most definitions of the money supply.
       The legislation of the Hundred Days incentivized price and 
     wage increases, reduced the working week, cut government 
     salaries, increased some marginal taxes, tolerated a degree 
     of cartelism to raise prices and avoid over-production, 
     encouraged collective bargaining, and engaged in massive 
     workfare schemes that employed nearly half the unemployed in 
     projects of conservation and public works. In the first year 
     of these programs, 500,000 miles of roads and 40,000 schools, 
     3,500 parks and 1,000 airfields were built or upgraded. The 
     Civilian Conservation Corps, through the 'thirties, thinned 
     four million acres of trees, stocked one billion fish, and 
     built 30,000 animal shelters.
       Ordinary unemployment declined by four million through 
     1933, partly due to the reduction in the work week. Farmers 
     voted by category to approve production cutbacks, permitting 
     farm price increases, and some of the agricultural surplus 
     was taken for distribution to the needy. The Tennessee Valley 
     Authority was launched and great progress began on rural 
     electrification, flood control, and drought control.
       The Hundred Days also refinanced the nation's mortgages, 
     effectively departed the gold standard, exchanged embassies 
     with the Soviet Union, and repealed Prohibition.


                          The Second New DEAL

       The second New Deal, in 1934 and 1935, was built around 
     Social Security and included the Labour Relations Act, the 
     Securities and Exchange Commission, a comprehensive 
     modernization of the Federal Reserve, and what was called, 
     but was not really, a Wealth Tax. It outraged William 
     Randolph Hearst and stole the thunder of Huey Long and other 
     radicals, as it was designed to do.
       After a pause, when unemployment again began to rise, 
     Roosevelt brought in the third New Deal in 1938 with the Fair 
     Labor Standards Act and massive public works and conservation 
     employment schemes. These were successful and reduced 
     unemployment in mid-1939 to about 8%, less than two points 
     above where it stands today, if the public sector relief 
     workers are considered to be employed people.
       Thereafter, like other countries, the United States relied 
     on rearmament and the selective service to reduce 
     unemployment, which fell by up to 500,000 per month coming up 
     to the 1940 election, and had almost vanished before the 
     entry of the United States into the war in 1941.


                         The GI Bill of Rights

       Finally, came the GI Bill of Rights, which greatly 
     subsidized the education, and home and farm and business 
     ownership of veterans. In the late 'forties, nearly half the 
     male university students of the United States were 
     beneficiaries of that act and the barriers to advancement for 
     working class families were largely removed.
       I yield to few people in my enthusiasm for the capitalist 
     system, but we must all remember that in 1933, capitalism in 
     America had failed, and the political system was in danger of 
     failing with it.
       Roosevelt developed a refrain in his later elections that 
     served him well and was unanswerable. It want: ``You are, 
     most of you, old enough to remember what things were like in 
     1933.
       ``You remember the closed banks and the breadlines and the 
     starvation wages; the foreclosures of homes and farms, and 
     the bankruptcies of business; the `Hoovervilles,' and the 
     young men and women of the Nation facing a hopeless, jobless, 
     future; the closed factories and mines and mills; the ruined 
     and abandoned farms; the stalled railroads and the empty 
     docks; the blank despair of a whole Nation, and the utter 
     impotence of the Federal Government.''
       The voters did remember, as people remember a horrible 
     nightmare; but it had not been a dream; it was the United 
     States in 1933.

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